The term “payment gateway” refers to the software that bridges a merchant’s website and the financial institution that processes the buyer’s credit or debit card. Online companies in today’s age of cybercrime require trustworthy card payment processing methods. Payment gateway software achieves this. However, the specifics are more complicated.
Information on the payment gateway system
The process of making an online purchase may appear straightforward at first. The payment gateway software running in the background is responsible for much of the work here. The entire complicated procedure is outlined here in simplified form:
Suppose you use a Wells Fargo Mastercard to purchase a laptop computer online. When purchasing online, you provide your card number, expiration date, billing address, and perhaps the CCV code.
When you provide that data, it goes straight to the gateway where your payment will be processed. Transport Layer Security and Secure Sockets Layer networks are commonly used for communication. The merchant’s processor is the next in line to receive the encrypted payment details from the payment gateway software.
In a short time (seconds at most), the issuing bank decides whether or not to approve the transaction. The payment gateway will relay the transaction details back to the site if everything checks out.
Payment gateway software also supports ACH transactions with credit and debit cards.
Software Used as a Payment Gateway: Some Examples
Several distinct payment gateway options are available. Here are just a few instances:
- Platform-based payment gateways. This program allows a shop to conduct business from its own website.
- They hosted payment gateways. Using a gateway hosted on another person’s server is an alternative to platform-based software. If this framework is implemented, customers will be sent to an external site to provide their payment information. Once that’s done, they’ll be returned to the retailer’s site.
- Local bank system. In a manner analogous to the hosted payment gateway, the payment gateway’s website is sent to the buyer. Customers are returned to the vendor’s site after successful payment. The re-route is accompanied by notification information.
Payment gateway software has several advantages.
Online payment gateway software can offer several benefits beyond only the ability to send and receive data. Among these are:
- Virtual terminal. You might think of a virtual terminal as the online equivalent of a traditional cash register. Virtual terminals can be designed for use on smartphones and tablets in addition to computers. Connecting a credit card reader to a computer through a USB connection allows a virtual terminal to be utilized in a brick-and-mortar setting.
- Encryption and tokenization. Payment gateway apps may encrypt and tokenize data, which is especially helpful as cybercrime gets harder to combat. If sensitive information is compromised, it is rendered useless in the wrong hands, thanks to these procedures.
- Storage of payment information. Buyers can use any of their saved cards to make a purchase thanks to the flexibility provided by payment gateway software. It’s also possible to keep several addresses. Your private information is encrypted and safely stored off-site, away from the online shop.
- Payment Gateways are PCI Compliant. Since the payment gateway is hosted on a separate server from the merchant’s e-commerce platform, PCI compliance for the merchant’s network is unnecessary.
- Quickbooks. Quickbooks may be used with many different kinds of payment processors now. It expedites importing data into accounting software for internet enterprises, which would have taken far longer with previous data transfer methods.
- Customization. Typically, several APIs are available in payment gateway software. These supplementary programs allow for the modification of a certain payment gateway.
- Global payments. A few service providers’ payment gateways support many languages and multiple currencies. However, this feature may come with further costs.
- Customer service. In most cases, customer assistance for e-commerce payment gateways is sufficient. Research the company’s product and customer service support track record before committing to its payment gateway software.
- Multiple forms of payment. Visa, Mastercard, Discover, and American Express are among those accepted. PayPal and JCB are two examples of less prevalent payment methods that might be taken.
Merchant Accounts and Payment Processing Software
A merchant account was all that was required for offline businesses to accept credit card payments before the rise of the Internet. However, a virtual payment solution is required for an internet firm. The software used as a payment gateway meets this need.
These days, a merchant account can be bundled with payment gateway software. For certain shops, this might be the best method of accepting payments.
Integration of a Payment Gateway into an Online Store
It’s not hard to set up a payment gateway for an internet store to accept credit card payments. The necessary software is often pre-installed on the majority of shopping carts. A website can also integrate a payment gateway application, although this would require additional effort from the business.
Many of the features described above should be at the top of your list when searching for the best payment gateway software. Many companies will look for capabilities like PCI compliance, API access, tokenization, encryption, and international payment processing. These functionalities can be found in the majority of payment gateway software packages. For instance, there’s UniPay.
